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Sterling Gains Against US Dollar as UK GDP Report Looms

Sterling Gains Against US Dollar as UK GDP Report Looms

Key Events for Our Funded Traders

Key Takeaways

  • The British pound is pushing higher in its fifth straight day of advances
  • All eyes on the upcoming UK GDP report and FOMC meeting minutes

The Sterling’s Comeback

The GBP/USD shifted gears to the upside early on Tuesday, looking on track to notch a fifth consecutive session of gains. The uninterrupted streak comes on the heels of a weak September where the pound dropped by 3.75%, its largest monthly loss of the year. 

The sterling’s upside is likely fueled by traders anticipating Thursday’s GDP data out of the UK. What’s more, markets will be parsing the Fed’s meeting minutes, also tomorrow.

Last month, the Bank of England decided to follow in the US Federal Reserve’s footsteps and pause its key lending rate at 5.25%. Economists predict that this trend could continue, and that the BoE would maintain its current interest rate. The UK’s central bank could, however, decide to raise it in the coming months, in a move aimed to manage inflation and achieve the 2% target rate.

On the news front, the UK’s Gross Domestic Product (GDP) report is due Thursday, with August’s data. The figure is used as the key measure of economic growth based on the value of goods and services.

Stateside Updates

On Wednesday, the Federal Reserve will be releasing the minutes from their September 19th-20th meeting. Investors will look for insights regarding interest rates and monetary policies made by the US central bank. 

Further, market participants can also look forward to tomorrow’s US PPI report and Thursday’s CPI data. The Producer Price Index (PPI) can help gauge inflation by looking at the price changes faced by industries or manufacturers. With that in mind, the PPI report may be an earlier indicator of inflation compared to the Consumer Price Index (CPI) report, which will show if price pressures have cooled in September from the month prior.

A busy economic calendar can distract from a trader’s overall goals. To stay profitable, make sure you manage your risk effectively, with tools such as stop loss. Stay informed, disciplined, and adaptable.